What is a Qualified Income Trust or Miller Trust?

If you are in the process of applying for Medicaid/TennCare benefits, you may be told you need a Qualified Income Trust (“QIT”), also known as a “Miller Trust,” before you can qualify.  Most people have never heard of a QIT and are already in an urgent situation when a facility worker sends them to an attorney for this device.  Fortunately, getting a QIT is usually not very difficult or time-consuming, and you can quickly provide this document to get yourself or your loved one qualified for benefits.

A QIT is a type of irrevocable trust for people who have a little too much monthly income to qualify for Medicaid/TennCare benefits – and “a little” may be as small an amount as $1!  As of 2017, if the applicant earns more than $2205/month in countable income, he or she cannot qualify to receive TennCare benefits to help pay for care.  (Update: the income cap is $2250 as of 2018.)  The amount of excess monthly income is held in the trust so that it is not counted against the applicant.  Once in the QIT, the income is not considered countable, so the applicant can then qualify for benefits.

To set up a QIT, there must be both an applicant and a trustee, and they cannot be the same person.  The trustee is responsible for controlling the account and making payments on behalf of the trust creator (the TennCare applicant).  Both the applicant and the trustee (or the trustee’s Attorney-in-Fact designated in their Power of Attorney) must sign the document in front of a notary public.  Then the applicant or their Attorney-in-Fact must take the QIT to a bank to set up the trust account.

Every month, the applicant’s excess income is deposited in the QIT account.  The trustee may use the money in the account for limited purposes:  a $50 Personal Needs Allowance, monthly supplemental health insurance premiums, residential care facility costs, or a community spouse allocation.  A minimum of $20 should always remain in the account to pay for fees.

A QIT is a type of trust with a “payback provision,” meaning that when the applicant passes away, TennCare has the right to claim all the remaining funds in the account.  This provision is why TennCare allows excess income to be held in the trust in the first place.  Any excess income held in the trust can be used exclusively for care-related expenses, and if it is not used for those purposes, it is returned to the State after the applicant dies.